8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 10, 2022

Techpoint, Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware	000-55843	80-0806545
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)

2550 N. First Street, #550 San Jose, CA	95131
(Address of principal executive offices)	(Zip Code)

Registrant’s Telephone Number, Including, Area Code: (408)324-0588

N/A

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Japanese Depositary Shares, each representing one Common Stock Share, $0.0001 par value per share	M-6697	Tokyo Stock Exchange (Mothers Market)

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Item 2.02 Results of Operations and Financial Condition.

On February 10, 2022 (Japanese Standard Time), Techpoint, Inc. (together with its wholly-owned subsidiaries, the “Company”, “we”, “us” and “our”) filed with the Tokyo Stock Exchange a Japanese report referred to as “Kessan Tanshin,” which contained the Company’s unaudited financial results for the year ended December 31, 2021 (the “Tanshin”). A copy of the English translation of the Tanshin is attached hereto as Exhibit 99.1 and is incorporated by reference herein.

The information in this Form 8-K, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section and shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), except as shall be expressly set forth by specific reference in such a filing.

This Form 8-K, including Exhibit 99.1, contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 31E of the Exchange Act, including but not limited to statements about the Company’s anticipated financial results for the year ending December 31, 2022. The forward-looking statements in this Form 8-K involve risks and uncertainties, and actual results may differ materially from those referred to in these forward-looking statements due to a number of factors, including but not limited to: the effect of competitive and economic factors on the Company’s business; the fact that the Company has a limited operating history which makes it difficult to evaluate its current and future prospects and future performance; changes in laws and regulations, including international trade regulations, that may impact the Company, the Company’s customers or the Company’s suppliers; fluctuations in results from period to period as a result of unpredictable volume and timing of customer orders; uncertain demand in the Company’s primary markets; the potential for decreases in the overall average selling prices of its products; changes in the relative sales mix of its products; changes in its cost of finished goods; changes in customer order patterns including order cancellations; the Company’s ability to successfully develop, introduce and sell new or enhanced products in a timely manner; and other events that could disrupt supply, delivery, or demand of the Company’s products. These and other risks that could affect the Company’s financial results are set forth in the “Risk Factors” section in the Company’s Annual Report on Form 10-K and Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission at www.sec.gov. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to publicly release or otherwise disclose the result of any revision to these forward-looking statements that may be made as a result of events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Item 7.01 Regulation FD Disclosure.

The information in Item 2.02 is incorporated by reference into this Item 7.01.

Non-GAAP Financial Information

• In the Tanshin, for the years ended December 31, 2021 and 2020, the Company presents non-GAAP income from operations based on the exclusion of stock-based compensation expense and non-GAAP net income based on the exclusion of stock-based compensation expense and the relating tax impact.

The following tables contain a reconciliation of the non-GAAP financial measures to the most directly comparable GAAP (generally accepted accounting principles in the United States) financial measures.

Year Ended December 31, 2021	Income From Operations		Net Income
GAAP	$	19,885	$	17,287
Stock-based compensation expense		1,845		1,845
Adjustment for taxes (1)		—		(243	)
Non-GAAP	$	21,730	$	18,889
(1) Adjustment for taxes based on an assumed 13.19% effective tax rate, which was our assumed effective tax rate for fiscal 2021.

Year Ended December 31, 2020	Income From Operations		Net Income
GAAP	$	3,698	$	3,342
Stock-based compensation expense		1,486		1,486
Adjustment for taxes (1)		—		(218	)
Non-GAAP	$	5,184	$	4,610
(1) Adjustment for taxes based on an assumed 14.66% effective tax rate, which was our assumed effective tax rate for fiscal 2020.

1

Note on non-GAAP financial information: The Company uses non-GAAP measures of adjusted income from operations and net income, which are adjusted from results based on GAAP to exclude certain expenses. These non-GAAP financial measures are provided to enhance the user’s overall understanding of the Company’s current financial performance and its prospects for the future. Specifically, the Company’s management believes that non-GAAP results provide useful information to the Company’s board of directors, management and investors as these non-GAAP results exclude certain expenses that management believes are not indicative of the Company’s core operating results and can be impacted by factors beyond management’s direct control, such as the Company’s trading value. These non-GAAP results are some of the primary measurements management uses to assess the Company’s performance, allocate resources and plan for future periods. Reported non-GAAP results should only be considered as supplemental to results prepared in accordance with GAAP, and not considered as a substitute for, or superior to, GAAP results. These non-GAAP measures may differ from the non-GAAP measures reported by other companies in the Company’s industry. A reconciliation of non-GAAP guidance measures to corresponding GAAP measures on a forward-looking basis is not available due to high variability and low visibility with respect to the charges which are excluded from these non-GAAP measures.

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Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number	Description
99.1	English Translation of Tanshin, dated February 10, 2022.
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Techpoint, Inc.
Date: February 10, 2022	By:	/s/ Fumihiro Kozato
		Fumihiro Kozato
		President and Chief Executive Officer (Principal Executive Officer)

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EX-99.1

Exhibit 99.1

Financial Results for the Year Ended December 31, 2021 (Unaudited)

February 10, 2022

Company Name:	Techpoint, Inc.
Listed Exchange:	Mothers market of the Tokyo Stock Exchange
Identification Code:	6697
Website URL:	www.techpoint.co.jp
Representative:	Fumihiro Kozato, President and Chief Executive Officer
Contact:	Hiroshi Kondo, Vice President Corporate Marketing and
	President of Techpoint Japan KK
	03-6205-8405
Expected Date of Annual Shareholders Meeting:	June 2, 2022
Expected Date of Annual Securities Report Filing:	March 11, 2022
Expected Start Date of Dividend Payment:	February 15, 2022
Supplementary Materials for Financial Results:	Included
Earnings Announcement for Financial Results:	Included

1. Financial Results for the Year Ended December 31, 2021 (January 1, 2021 to December 31, 2021)

(1) Consolidated Operating Results

(Unit: thousands, % change as compared to the previous year)

	Revenue					Income from Operations					Income Before Income Taxes					Net Income					Non-GAAP Net Income
Year Ended December 31,	Amount		% Change			Amount		% Change			Amount		% Change			Amount		% Change			Amount		% Change
2021	$	64,707		88.4	%	$	19,885		437.7	%	$	19,914		408.5	%	$	17,287		417.3	%	$	18,889		309.7	%
	¥	7,442,599				¥	2,287,173				¥	2,290,508				¥	1,988,351				¥	2,172,613
2020	$	34,339		7.2	%	$	3,698		54.4	%	$	3,916		59.9	%	$	3,342		52.3	%	$	4,610		33.2	%
	¥	3,949,672				¥	425,344				¥	450,418				¥	384,397				¥	530,242

The Company’s consolidated financial statements are prepared in U.S. dollars. For amounts disclosed in Japanese yen, an exchange rate of ¥115.02 Japanese yen to $1.00 U.S. dollar was used based on the Telegraphic Transfer Middle Rate quoted by Mitsubishi UFJ Financial Group’s official index as of December 30, 2021. This rate is also used for amounts disclosed in Japanese yen for prior periods in order to exclude the impact from the change in foreign currency exchange rates when comparing financial results in the current period to those in the prior period, which is permitted according to the current disclosure requirements for Tanshin in Japan.

The Company’s comprehensive income for the year ended December 31, 2021 and 2020 was $17.2 million (¥1,980.6 million, 406.8%) and $3.4 million (¥390.8 million, 55.9%), respectively. The Company’s non-GAAP operating income for the year ended December 31, 2021 was $21.7 million (¥2,499.4 million) based on the exclusion of stock-based compensation of $1.8 million  (¥212.2 million). The Company’s non-GAAP net income for the year ended December 31, 2021 was $18.9 million (¥2,172.6 million) based on the exclusion of stock-based compensation of $1.8 million  (¥212.2 million) and the relating income tax impact based on a 13.19% effective tax rate. The Company’s non-GAAP operating income for the year ended December 31, 2020 was $5.2 million (¥596.3 million) based on the exclusion of stock-based compensation of $1.5 million (¥170.9 million). The Company’s non-GAAP net income for the year ended December 31, 2020 was $4.6 million (¥530.2 million) based on the exclusion of stock-based compensation of $1.5 million (¥170.9 million) and the relating income tax impact based on an assumed 14.66% effective tax rate.

(Unit: $ or ¥, except for % data)

Year Ended December 31,	Basic EPS		Diluted EPS		Non-GAAP Basic EPS		Non-GAAP Diluted EPS		Ratio of Net Income to Equity			Ratio of Income Before Tax to Total Assets			Operating Margin
2021	$	0.97	$	0.93	$	1.06	$	1.02		38.8	%		37.9	%		30.7	%
	¥	112	¥	107	¥	122	¥	117
2020	$	0.19	$	0.19	$	0.26	$	0.26		9.6	%		9.6	%		10.8	%
	¥	22	¥	22	¥	30	¥	30

(2) Consolidated Financial Position

(Unit: thousands, except per share and % data)

Year Ended December 31,	Total Assets		Net Assets		Total Stockholders' Equity		Stockholders' Equity Ratio			Stockholders' Equity Per Share
2021	$	61,938	$	51,817	$	51,817		83.7	%	$	2.89
	¥	7,124,109	¥	5,959,991	¥	5,959,991				¥	332
2020	$	43,219	$	37,373	$	37,373		86.5	%	$	2.11
	¥	4,971,049	¥	4,298,642	¥	4,298,642				¥	243

(3) Consolidated Cash Flows

(Unit: thousands)

Year Ended December 31,	Net Cash Provided by Operating Activities		Net Cash Provided by     (Used in) Investing Activities			Net Cash Provided by              (Used in) Financing Activities			Cash and Cash Equivalents
2021	$	14,247	$	1,183		$	(135	)	$	27,379
	¥	1,638,690	¥	136,069		¥	(15,528	)	¥	3,149,133
2020	$	2,725	$	(2,093	)	$	61		$	12,084
	¥	313,430	¥	(240,737	)	¥	7,016		¥	1,389,902

2. Dividends

(Unit: $ or ¥, except for % data)

	Annual Dividend														Ratio of Total Dividends
Year Ended December 31,	First Quarter		Second Quarter		Third Quarter		Year- End		Total		Total Dividends		Payout Ratio		to Net Assets
2020	$	-	$	-	$	-	$	-	$	-	$	-		-		-
2021	$	-	$	-	$	-	$	-	$	-	$	-		-		-
2022 (Forecast)	$	0.25	$	-	$	0.25	$	-	$	0.50	$	-		-		-

3. Forecasted Operating Results for the Year Ending December 31, 2022 (January 1, 2022 to December 31, 2022)

	Revenue					Income from Operations					Income Before Income Taxes					Net Income					Non-GAAP Net Income
Year Ending December 31,	Amount		% Change			Amount		% Change			Amount		% Change			Amount		% Change			Amount		% Change
2022	$	71,469		10.5	%	$	19,882		0.0	%	$	19,922		0.0	%	$	17,133		(0.9	)%	$	19,313		2.2	%
	¥	8,220,364				¥	2,286,828				¥	2,291,428				¥	1,970,638				¥	2,221,381

(Unit: thousands, except per share and % data)

Year Ending December 31,	Basic EPS		Diluted EPS		Non-GAAP Basic EPS		Non-GAAP Diluted EPS
2022	$	0.94	$	0.89	$	1.06	$	1.01
	¥	108	¥	102	¥	122	¥	116

The forecasted basic and diluted Earnings Per Share, or EPS, for the year ending December 31, 2022 was computed using a forecasted weighted average shares outstanding for the year ending December 31, 2022. The forecasted non-GAAP figures exclude stock-based compensation of $2.2 million (¥250.8 million) net of the relating income tax impact based on an assumed 14.00% effective tax rate.

The Company’s forecasts are made in U.S. dollars.

4. Notes

(1) Changes in subsidiaries during the period: Not Applicable

(2) Changes in accounting policies

1. Due to codification revisions: None

2. Due to other reasons: None

(3) Stock information:

	December 31, 2021		December 31, 2020
Common stock		17,928,748		17,690,062
Treasury stock		—		—
Weighted average shares outstanding used in computing net income per share		17,830,808		17,587,804

Audit Procedures:

This Tanshin is not in the scope of audit procedures by the Company’s independent auditors under the Financial Instruments and Exchange Act of Japan. Additionally, as of the date of this Tanshin, audit procedures performed in accordance with the standards of the Public Company Accounting Oversight Board (“PCAOB”) in the United States have yet to be completed. The Company’s independent auditors have not compiled or been involved in the preparation of the forecasted financial results for the year ending December 31, 2022. Accordingly, they assume no responsibility for the accuracy or presentation of this information.

Forward Looking Statements:

The Tanshin includes forward-looking statements that involve a number of risks and uncertainties, many of which are beyond the Company’s control. The Company’s actual results may differ from those anticipated or expressed in these forward-looking statements as a result of various factors. All statements other than statements of historical facts contained in the Tanshin, including statements regarding the Company’s future results of operations and financial position, strategy and plans, and the Company’s expectations for future operations, are forward-looking statements. The Company has based these forward-looking statements largely on its current expectations and projections about future events and trends that we believe may affect the Company’s financial condition, results of operations, strategy, short-term and long-term business operations and objectives, and financial needs. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in the Tanshin may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Any forward-looking statement made by the Company in the Tanshin speaks only as of the date on which it is

made. The Company disclaims any duty to update any of these forward-looking statements after the date of the Tanshin, except as required by law.

Investors Meeting:

Please refer to the Company’s website for details on its Investors Meetings for holders of the Company’s Japanese depositary shares, or JDSs.

Appendix Index

		Page
1.	Management’s Discussion and Analysis of:
(1)	Financial Condition and Results of Operations	2
(2)	Liquidity and Capital Resources	4
(3)	Forecast for the Year Ending December 31, 2022	4
(4)	Dividends	5
2.	Accounting Standards	5
3.	Consolidated Financial Statements and Supplementary Data (Unaudited)
(1)	Consolidated Balance Sheets	6
(2)	Consolidated Statements of Operations and Comprehensive Income	7
(3)	Consolidated Statements of Stockholders’ Equity	8
(4)	Consolidated Statements of Cash Flows	9
(5)	Notes to Consolidated Financial Statements	10

The Company’s consolidated financial statements are prepared in U.S. dollars. For amounts disclosed in Japanese yen, an exchange rate of ¥115.02 Japanese yen to $1.00 U.S. dollar was used based on the Telegraphic Transfer Middle Rate quoted by Mitsubishi UFJ Financial Group’s official index as of December 30, 2021. This rate is also used for amounts disclosed in Japanese yen for prior periods in order to exclude the impact from the change in foreign currency exchange rates when comparing financial results in the current period to those in the prior periods, which is permitted according to the current disclosure requirements for Tanshin in Japan. The Company’s JDSs are traded on the Mothers market of the Tokyo Stock Exchange. Each JDS represents one share of common stock.

1

1. Management’s Discussion and Analysis

(1) Comparison of the Year Ended December 31, 2021 and December 31, 2020

Revenue

	Year Ended December 31,				Change
	2021		2020		Amount		%
	(dollars in thousands)
Revenue	$	64,707	$	34,339	$	30,368		88	%

Revenue increased by $30.4 million, or 88%, for the year ended December 31, 2021 as compared to the year ended December 31, 2020. This was primarily due to a $16.6 million increase in security surveillance market revenue as a result of a 106% increase in the volume of shipments and a $13.8 million increase in automotive market revenue resulting from a 44% increase in the volume of shipments, partially offset by a decrease in average selling price attributable to product mix.

We have determined that pricing of our products remains stable in our target markets. Fluctuation in our overall average selling price is directly attributable to changes in product mix given the natural pricing variation of the products in our portfolio. When the product mix shifts towards the higher priced products in our portfolio, the average selling price will be higher than when the product mix shifts towards the lower price point products.  

Revenue by geographic region

The table below sets forth the major components of revenues by the geographic region to which products were delivered as a percentage of total revenues for the year ended December 31, 2021 and 2020:

	Year Ended
	December 31,
	2021			2020
China		69	%		64	%
Taiwan		16			19
South Korea		11			14
Japan		3			2
Other		1			1
Total revenue		100	%		100	%

Cost of revenue and gross margin

	Year Ended December 31,						Change
	2021			2020			Amount		%
	(dollars in thousands)
Cost of revenue	$	29,660		$	16,132		$	13,528		84	%
Gross margin		54	%		53	%

Cost of revenue increased $13.5 million, or 84%, for the year ended December 31, 2021 as compared to the year ended December 31, 2020. Gross margin increased to 54% for the year ended December 31, 2021 from 53% for the year ended December 31, 2020.Cost of revenue increased primarily due to a $12.7 million increase in cost of goods sold primarily attribute to a 73% increase in the volume of shipments, a $0.8 million increase as a result of an increase in inventory write-downs, decreased utilization of previously reserved inventory, increased warranty expense and product mix. Gross margin was positively impacted by these changes.

We expect gross margins to fluctuate in future periods due to changes in customer and product mix, average unit selling prices, manufacturing costs, adjustments to inventory, if any, and end market product demand.

2

Research and development expense

	Year Ended December 31,				Change
	2021		2020		Amount			%
	(dollars in thousands)
Research and development	$	6,371	$	7,244	$	(873	)		(12	)%

Research and development expense decreased $0.9 million, or 12%, for the year ended December 31, 2021 as compared to the year ended December 31, 2020.This decrease was primarily due to a $1.3 million decrease in tape-out expenses associated with the development of new products, offset by a $0.3 million increase in personnel costs and a $0.1 million increase in product costs related to design, prototype and software expense.

Selling, general and administrative expense

	Year Ended December 31,				Change
	2021		2020		Amount		%
	(dollars in thousands)
Selling, general and administrative	$	8,791	$	7,265	$	1,526		21	%

Selling, general and administrative expenses increased by $1.5 million, or 21%, for the year ended December 31, 2021 as compared to the year ended December 31, 2020. This increase was mainly due to a $0.5 million increase in personnel costs, a $0.5 million increase in professional service fees due to additional administrative efforts associated with operating as a U.S. company that is publicly traded in Japan, a $0.3 million increase in stock-based compensation, and a $0.2 million increase in other administrative costs.

Other income – net

	Year Ended December 31,				Change
	2021		2020		Amount			%
	(dollars in thousands)
Other income - net	$	29	$	218	$	(189	)		(87	)%

Other income - net for the year ended December 31, 2021 decreased by $0.2 million, or 87% as compared to the year ended December 31, 2020 primarily due to the net interest income from investments.

Provision for income taxes

	Year Ended December 31,				Change
	2021		2020		Amount		%
	(dollars in thousands)
Provision for income taxes	$	2,627	$	574	$	2,053		358	%

The provision for income taxes increased by $2.1 million, or 358%, for the year ended December 31, 2021 as compared to the year ended December 31, 2020. The increase in the provision for income taxes was primarily due to an increase in taxable income.

Net Income

	Year Ended December 31,				Change
	2021		2020		Amount		%
	(dollars in thousands)
Net income	$	17,287	$	3,342	$	13,945		417	%

As a result of the foregoing, net income increased by $13.9 million, or 417% for the year ended December 31, 2021 as compared to the year ended December 31, 2020.

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(2) Liquidity and Capital Resources

Our cash, cash equivalents and short-term investments as of December 31, 2021 were $42.3 million. We believe our existing cash, cash equivalents, short-term investments and the cash we expect to generate from operations will be sufficient to meet our anticipated cash needs for at least the next 12 months.

Operating Activities

During the year ended December 31, 2021, net cash provided by operating activities was $14.2 million, primarily due to net income of $17.3 million and non-cash charges of $3.8 million primarily attributable to stock-based compensation, noncash lease expense, depreciation and amortization, deferred income taxes and provision for excess inventories, partially offset by cash outflow from the net change in operating assets and liabilities of $6.8 million. The net cash outflow used in operating assets and liabilities was primarily attributable to a $5.2 million cash outflow for inventory as units manufactured during the period and on hand were in excess of product sales during the period to support future demand, a $0.8 million cash outflow in accrued expense due to the timing of services performed, and a $0.8 million cash outflow in lease liabilities and other liabilities due to the renewal of an operating lease.

Investing Activities

During the year ended December 31, 2021, cash provided by investing activities was $1.2 million, primarily a $17.4 million cash inflow due to proceeds from maturities of debt securities, partially offset by a $16.0 million cash outflow attributable to the purchase of debt securities and a $0.3 million cash outflow due to purchases of property and equipment.

Financing Activities

During the year ended December 31, 2021, cash used in financing activities was $0.1 million, primarily due to payments for shares withheld for tax withholdings on vesting of restricted stock units, partially offset by net proceeds from the exercise of stock options.

Forecast for the Year Ending December 31, 2022

After careful consideration of current uncertainties in the global economy, instabilities in global politics, the COVID-19 pandemic and semiconductor manufacturing constraints, the Company is providing its financial forecast for the year ending December 31, 2022 as follows.

Revenue is expected to be $71.5 million, which is an increase of 10.5% from 2021, excluding shipments of the newly developed CMOS Image Sensor product and the Door-Phone product. Revenue for the Security Surveillance Market will remain approximately the same or decrease slightly compared to that of 2021 mainly due to a cost increase in our final products and inventory adjustments caused by the global semiconductor shortage. However, additional revenue from the Security Surveillance Market can be expected if the new bidirectional audio ISP products, currently under development, go into volume production. In contrast, despite the economic inflation in many of the regions where our final products are shipped and the shortage in semiconductor supplies, revenue in the Automotive Market is expected to increase approximately 22% compared to that of 2021. The Company may continue to update its revenue guidance from time to time, as it secures manufacturing capacities for its CMOS Image Sensor and the Door-Phone product lines during the second half of the fiscal year. Operating expense is expected to be $18.7 million an increase of 23% as compared to 2021 due to an increase in headcount primarily to support sales initiatives, and an increase in new product tape-out activities, which is expected to result in the Company’s largest single year spending on tape-out activities. Operating income is expected to be $19.9 million, approximately the same as 2021. GAAP basis net income is expected to be $17.1 million, a decrease of 0.9% from 2021. Non-GAAP basis net income is expected to be $19.3 million, an increase of 2.2% from 2021.

We expect our revenue to be lower in the first quarter of 2022 as compared to the fourth quarter of 2021, largely because most of our semiconductors are sold to customers located in Asia, primarily to customers located in regions who observe the Lunar New Year holiday. Revenue is expected to be $16.0 million, a decrease of 8.5% from the fourth quarter of 2021 but an increase of 10.3% from the first quarter of 2021.  

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Since it is difficult to predict the future spread of COVID-19 and the timing of its cessation, the Company has calculated the forecast figures based on the assumption that COVID-19 will continue to have the same level of impact during  fiscal year 2022 as it does at present.

Dividend Policy

The Company’s Board of Directors has adopted a dividend policy to link dividend payments to business performance on an ongoing basis. The amount to be paid in future dividends will be reviewed by the Board, with an aggregate dividend target amount for each fiscal year equal to approximately 50% of our annual non-GAAP net income for the prior fiscal year. The Company anticipates making payment of future dividends in two installments following its December 31 year end. This policy can be modified or terminated at any time at the discretion of the Company’s Board of Directors, including the Board’s determination to cease paying dividends in the future. The payment will be made in accordance with and subject to the terms of the Trust Agreement dated August 31, 2017 between the Company; Mizuho Securities Co., Ltd.; Mitsubishi UFJ Trust and Banking Corporation; and The Master Trust Bank of Japan, Ltd., which agreement governs the rights of JDS holders.

2022 Dividend

On December 22, 2021, the Company announced a special cash dividend of an aggregate of $0.50 per share for fiscal 2022, payable in two equal installments of $0.25 per share. The first installment of the dividend has been accrued as of December 31, 2021 in the amount of $4.5 million and is payable to stockholders of record on January 31, 2022. The payment date for the first installment on its shares of common stock (including common stock underlying its Japanese Depositary Shares (JDS)) will be February 15, 2022. The second installment of the dividend is not accrued as of December 31, 2021 because it is anticipated to be paid in the third fiscal quarter of 2022 and the declaration of the second installment is subject to the Board approval and in accordance with applicable law. The Company intends to provide additional information about the second installment of the dividend in the second fiscal quarter of 2022. The timing for receipt of the dividend payments by individual holders of Techpoint common stock and JDSs will vary due to the payment process for JDS holders. The amount paid to JDS holders will be reduced by any applicable U.S. withholding income tax, and then converted into Japanese Yen. Once the dividend is converted into Japanese Yen, a distribution payment fee and any additional local taxes will be paid from the distribution amount. As a result, the net amount of the first dividend installment that is ultimately received by JDS holders will be less than $0.25 per JDS. The Company anticipates that JDS holders will receive the payment of the first installment of the fiscal 2022 dividend in their accounts in late-March 2022.

2. Accounting Policy Changes

None.

5

3. Consolidated Financial Statements and Supplementary Data (Unaudited)

(1) Consolidated Balance Sheets

(Unit: thousands, except share data)

	December 31, 2021						December 31, 2020
	$			¥			$		¥
Assets
Current assets:
Cash and cash equivalents	$	27,379		¥	3,149,133		$	12,084	¥	1,389,902
Short-term investments		14,942			1,718,628			17,567		2,020,556
Accounts receivable		336			38,647			118		13,572
Inventory		13,522			1,555,300			8,901		1,023,794
Prepaid expenses and other current assets		895			102,943			614		70,622
Total current assets		57,074			6,564,651			39,284		4,518,446
Property and equipment - net		713			82,009			647		74,418
Deferred tax assets		584			67,172			588		67,632
Right-of-use assets		1,009			116,055			959		110,304
Other assets		2,558			294,222			1,741		200,249
Total assets	$	61,938		¥	7,124,109		$	43,219	¥	4,971,049
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	1,838		¥	211,406		$	1,457	¥	167,585
Accrued liabilities		1,895			217,963			2,523		290,195
Liability related to early exercised stock options		1			115			19		2,185
Customer deposits		775			89,141			735		84,540
Lease liabilities		525			60,386			720		82,814
Dividend payable		4,504			518,050			—		—
Total current liabilities		9,538			1,097,061			5,454		627,319
Other liabilities		583			67,057			392		45,088
Total liabilities		10,121			1,164,118			5,846		672,407
Commitments and contingencies
Stockholders’ equity
Preferred stock, par value $0.0001 per share - 5,000,000 shares authorized as of December 31, 2021 and 2020; nil shares issued and outstanding as of December 31, 2021 and 2020.		—			—			—		—
Common stock, par value $0.0001 per share - 75,000,000 shares authorized as of December 31, 2021 and 2020; 17,928,748 and 17,690,062  shares issued and outstanding as of December 31, 2021 and 2020, respectively		2			230			2		230
Additional paid-in capital		24,251			2,789,350			22,523		2,590,595
Accumulated other comprehensive income (loss)		(26	)		(2,991	)		41		4,716
Retained earnings		27,590			3,173,402			14,807		1,703,101
Total stockholders’ equity		51,817			5,959,991			37,373		4,298,642
Total liabilities and stockholders’ equity	$	61,938		¥	7,124,109		$	43,219	¥	4,971,049

6

(2) Consolidated Statements of Operations and Comprehensive Income

(Unit: thousands, except share and per share data)

	Year Ended December 31, 2021						Year Ended December 31, 2020
	$			¥			$		¥
Revenue	$	64,707		¥	7,442,599		$	34,339	¥	3,949,672
Cost of revenue		29,660			3,411,493			16,132		1,855,503
Gross profit		35,047			4,031,106			18,207		2,094,169
Operating expenses
Research and development		6,371			732,792			7,244		833,205
Selling, general and administrative		8,791			1,011,141			7,265		835,620
Total operating expenses		15,162			1,743,933			14,509		1,668,825
Income from operations		19,885			2,287,173			3,698		425,344
Other income - net		29			3,335			218		25,074
Income before income taxes		19,914			2,290,508			3,916		450,418
Income taxes		2,627			302,157			574		66,021
Net income	$	17,287		¥	1,988,351		$	3,342	¥	384,397
Basic	$	0.97		¥	112		$	0.19	¥	22
Diluted	$	0.93		¥	107		$	0.19	¥	22
Weighted-average shares outstanding used in computing net income per share:
Basic		17,830,808						17,587,804
Diluted		18,565,882						17,929,541
Comprehensive income:
Net income	$	17,287		¥	1,988,351		$	3,342	¥	384,397
Other comprehensive income (loss), net of tax:
Unrealized gain (loss) on available-for-sale debt securities, net of tax benefit (expense) of $18, and ($11) for year ended December 31, 2021 and 2020, respectively		(67	)		(7,707	)		56		6,441
Comprehensive income	$	17,220		¥	1,980,644		$	3,398	¥	390,838

7

(3) Consolidated Statements of Stockholders’ Equity

(Unit: thousands, except share data)

	Common Stock					Additional Paid-In			Accumulated Other Comprehensive			Retained			Total Stockholders'
	Shares			Amount		Capital			Income (Loss)			Earnings			Equity
Balances as of December 31, 2019		17,449,572		$	2	$	20,928		$	(15	)	$	11,465		$	32,380
				¥	230	¥	2,407,139		¥	(1,725	)	¥	1,318,704		¥	3,724,348
Other comprehensive income - unrealized gain on available-for-sale debt securities		—		$	—	$	—		$	56		$	—		$	56
				¥	—	¥	—		¥	6,441		¥	—		¥	6,441
Issuance of common stock upon exercise of stock options and vesting of early exercised options		123,817		$	—	$	224		$	—		$	—		$	224
				¥	—	¥	25,763		¥	—		¥	—		¥	25,763
Issuance of common stock upon vesting of restricted stock units		141,175		$	—	$	—		$	—		$	—		$	—
				¥	—	¥	—		¥	—		¥	—		¥	—
Shares repurchased for tax withholdings on vesting of restricted stock units		(24,502	)	$	—	$	(115	)	$	—		$	—		$	(115	)
				¥	—	¥	(13,227	)	¥	—		¥	—		¥	(13,227	)
Stock-based compensation		—		$	—	$	1,486		$	—		$	—		$	1,486
				¥	—	¥	170,920		¥	—		¥	—		¥	170,920
Net income		—		$	—	$	—		$	—		$	3,342		$	3,342
				¥	—	¥	—		¥	—		¥	384,397		¥	384,397
Balances as of December 31, 2020		17,690,062		$	2	$	22,523		$	41		$	14,807		$	37,373
				¥	230	¥	2,590,595		¥	4,716		¥	1,703,101		¥	4,298,642
Other comprehensive loss - unrealized loss on available-for-sale debt securities		—		$	—	$	—		$	(67	)	$	—		$	(67	)
				¥	—	¥	—		¥	(7,707	)	¥	—		¥	(7,707	)
Issuance of common stock upon exercise of stock options and vesting of early exercised options		110,084		$	—	$	182		$	—		$	—		$	182
				¥	—	¥	20,934		¥	—		¥	—		¥	20,934
Issuance of common stock upon vesting of restricted stock units		151,608		$	—	$	—		$	—		$	—		$	—
				¥	—	¥	—		¥	—		¥	—		¥	—
Shares repurchased for tax withholdings on vesting of restricted stock units		(23,006	)	$	—	$	(299	)	$	—		$	—		$	(299	)
				¥	—	¥	(34,391	)	¥	—		¥	—		¥	(34,391	)
Stock-based compensation		—		$	—	$	1,845		$	—		$	—		$	1,845
				¥	—	¥	212,212		¥	—		¥	—		¥	212,212
Cash dividends declared ($0.25 per share)		—		$	—	$	—		$	—		$	(4,504	)	$	(4,504	)
				¥	—	¥	—		¥	—		¥	(518,050	)	¥	(518,050	)
Net income		—		$	—	$	—		$	—		$	17,287		$	17,287
				¥	—	¥	—		¥	—		¥	1,988,351		¥	1,988,351
Balances as of December 31, 2021		17,928,748		$	2	$	24,251		$	(26	)	$	27,590		$	51,817
				¥	230	¥	2,789,350		¥	(2,991	)	¥	3,173,402		¥	5,959,991

8

(4) Consolidated Statements of Cash Flows

(Unit: thousands, except share data)

	Year Ended December 31, 2021						Year Ended December 31, 2020
	$			¥			$			¥
Cash Flows From Operating Activities
Net income	$	17,287		¥	1,988,351		$	3,342		¥	384,397
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		400			46,008			358			41,176
Stock-based compensation		1,845			212,212			1,486			170,920
Amortization of premium on available-for-sale investments		186			21,394			141			16,218
Write-off of deferred costs and long lived assets		3			345			3			345
Inventory valuation adjustment		558			64,181			164			18,863
Deferred income taxes		22			2,530			78			8,972
Noncash lease expense		739			85,000			684			78,674
Changes in operating assets and liabilities:
Accounts receivable		(218	)		(25,074	)		(11	)		(1,265	)
Inventory		(5,179	)		(595,689	)		(3,017	)		(347,015	)
Prepaid expenses and other current assets		(225	)		(25,880	)		330			37,957
Other assets		14			1,610			(13	)		(1,495	)
Accounts payable		381			43,823			(76	)		(8,742	)
Accrued expenses		(813	)		(93,511	)		546			62,801
Customer deposits		40			4,601			(636	)		(73,153	)
Lease liabilities		(365	)		(41,982	)		(101	)		(11,617	)
Other liabilities		(428	)		(49,229	)		(553	)		(63,606	)
Net cash provided by operating activities		14,247			1,638,690			2,725			313,430
Cash Flows From Investing Activities
Purchase of property and equipment		(284	)		(32,666	)		(508	)		(58,430	)
Purchase of debt securities		(15,953	)		(1,834,914	)		(12,594	)		(1,448,562	)
Proceeds from maturities of debt securities		17,420			2,003,649			11,009			1,266,255
Net cash provided by (used in) investing activities		1,183			136,069			(2,093	)		(240,737	)
Cash Flows From Financing Activities
Net proceeds from exercise of stock options		164			18,863			176			20,244
Payment for shares withheld for tax withholdings on vesting of restricted stock units		(299	)		(34,391	)		(115	)		(13,228	)
Net cash provided by (used in) financing activities		(135	)		(15,528	)		61			7,016
Net increase in cash and cash equivalents		15,295			1,759,231			693			79,709
Cash and cash equivalents at beginning of period		12,084			1,389,902			11,391			1,310,193
Cash and cash equivalents at end of period	$	27,379		¥	3,149,133		$	12,084		¥	1,389,902
Supplemental Disclosure of Cash Flow Information
Cash paid for income taxes	$	3,108		¥	357,482		$	67		¥	7,706
Supplemental Disclosure of Noncash Investing and Financing Information
Property and equipment purchased but not yet paid	$	230		¥	26,455		$	51		¥	5,866
Vesting of early exercised options	$	18		¥	2,070		$	44		¥	5,061
Cash dividend declared but not yet paid	$	4,504		¥	518,050		$	—		¥	—

9

(3) Notes to Consolidated Financial Statements

Going Concern

Not applicable.

Basis of Consolidation and Accounting Standards

The Company’s consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, and have been prepared in conformity with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”). All intercompany balances and transactions have been eliminated. The functional currency of each of the Company’s subsidiaries is the U.S. dollar. Foreign currency gains or losses are recorded as other income (expense) in the Consolidated Statements of Operations and Comprehensive Income.

Segment Information

The Company’s chief operating decision maker, the chief executive officer, reviews financial information presented on a consolidated basis for purposes of making operating decisions and assessing financial performance on a regular basis. Accordingly, the Company considers itself to be one reportable segment, which is comprised of one operating segment, the designing, marketing and selling of mixed-signal integrated circuits for the security surveillance and automotive markets.

Product revenue from customers is designated based on the geographic region to which the product is delivered. Revenue by geographic region was as follows (in thousands):

	Year Ended
	December 31,
	2021		2020
China	$	44,549	$	22,105
Taiwan		10,611		6,587
South Korea		6,921		4,660
Japan		1,792		610
Other		834		377
Total revenue	$	64,707	$	34,339

Revenue by principal product lines were as follows (in thousands):

	Year Ended
	December 31,
	2021		2020
Security surveillance	$	32,636	$	16,104
Automotive		32,071		18,235
Total revenue	$	64,707	$	34,339

10

Net Income Per Share

The following table presents the calculation of basic and diluted net income per share (amounts in thousands, except per share data):

	Year Ended
	December 31,
	2021		2020
Numerator:
Basic:
Net income	$	17,287	$	3,342
Diluted:
Net income	$	17,287	$	3,342
Denominator:
Basic shares:
Weighted-average shares used in computing basic net income per share		17,830,808		17,587,804
Diluted shares:
Effect of potentially dilutive securities:
Stock awards (1)		735,074		341,737
Weighted-average shares used in computing diluted net income per share		18,565,882		17,929,541
Net income per share:
Basic	$	0.97	$	0.19
Diluted	$	0.93	$	0.19
Non-GAAP net income (2):
Non-GAAP net income	$	18,889	$	4,610
Basic shares:
Weighted-average shares used in computing basic non-GAAP net income per share		17,830,808		17,587,804
Non-GAAP net income per share:
Non-GAAP Basic	$	1.06	$	0.26

(1) Includes vesting of early-exercised options.

(2) Please refer to “Consolidated Operating Results” under “Financial Results for the Year Ended December 31, 2021 (January 1, 2021 to December 31, 2021)” for further non-GAAP information.

11

XML

Document and Entity Information	Feb. 10, 2022
Document Information [Line Items]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Feb. 10, 2022
Entity Registrant Name	Techpoint, Inc.
Entity Central Index Key	0001556898
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
Entity File Number	000-55843
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	80-0806545
Entity Address, Address Line One	2550 N. First Street
Entity Address, Address Line Two	#550
Entity Address, City or Town	San Jose
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	95131
City Area Code	408
Local Phone Number	324-0588
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Japanese Depositary Shares | Japan Exchange Group
Document Information [Line Items]
Trading Symbol	0001556898
Title of 12(b) Security	Japanese Depositary Shares, each representing one
Common Stock, Par Value
Document Information [Line Items]
Trading Symbol	0001556898
Title of 12(b) Security	Common Stock Share, $0.0001 par value per share